Porter and Porter & Ors (No. 2) - [2020] FamCA 554

FAMILY COURT OF AUSTRALIA

PORTER & PORTER AND ORS (NO. 2)

[2020] FamCA 554

FAMILY LAW – PROPERTY – Setting aside orders and a binding child support agreement – Where, in 2014, the parties entered into a final property settlement order and spousal maintenance orders and a binding child support agreement – Where the final property settlement order, in part, required the acquisition of the home for the wife and children over a ten year period – Where the husband became bankrupt during that period – Where an order is made pursuant to s 79A(1)(b) Family Law Act 1975 (Cth) to set aside the property settlement order – Where the husband’s trustees in bankruptcy, the husband, the husband’s former fiancé and various entities were parties to the proceedings – Where a new property settlement order is made – Where the binding child support agreement is set aside and new child support orders are made – Where the husband’s application for discharge of the spousal maintenance order is dismissed.

Bankruptcy Act 1966 (Cth)
Child Support (Assessment) Act 1989 (Cth)
Family Law Act 1975 (Cth)

Barclays Bank Ltd v Quistclose Investments Ltd [1968] UKHL 4
Gallup & Gallup [2009] FMCAfam 839
Garning & Director-General, Department of Communities, Child Safety and Disability Services & Anor [2013] FamCAFC 28
In the Marriage of Cawthorn (1998) 23 Fam LR
In the Marriage of La Rocca (1991) 14 Fam LR 715
Simpson & Hamlin (1984) FLC 91-576

APPLICANT:

Ms Porter

RESPONDENT:

Mr Porter

2^nd RESPONDENTS:

P Pty Ltd

3^rd RESPONDENTS:

Q Pty Ltd

4^th RESPONDENTS:

R Pty Ltd

5^th RESPONDENT:

Mr Dunst & Mr Simons as Trustees in Bankrupt Estate of Mr Porter

6^th RESPONDENTS:

Ms O

7^th RESPONDENTS:

S Pty Ltd

FILE NUMBER:

SYC

4014

2012

DATE DELIVERED:

25 June 2020

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Watts J

HEARING DATE:

11 - 14 March 2019;

14 October 2019;
18 November 2019

REPRESENTATION

SOLICITOR FOR THE APPLICANT:

Litigant in person

SOLICITOR FOR THE RESPONDENT:

Litigant in person

SOLICITOR FOR 5^TH RESPONDENTS

Litigants in person

SOLICITOR FOR 6^TH RESPONDENT:

Litigant in person

Orders

Pursuant to s 79A(1)(b) Family Law Act 1975 (Cth) (“the Act”), the property settlement order made on 20 June 2014 and as varied on 3 March 2015, be set aside.
Pursuant to s 136(1) Child Support (Assessment) Act, the binding financial support agreement made 23 June 2014 be set aside.
Pursuant to s 83(1) of the Act, the spousal maintenance order, being order 26 made 20 June 2014, be discharged.
All arrears under prior orders, agreements and third party debt notices are discharged to the date to which they stand paid.
Pursuant to s 79 of the Act, an order be made in accordance with paragraphs 6 to 20.

The Suburb E property

Within three (3) months, the wife pay to the Trustees the sum of $315,000 and discharge the Trustees of any liability in respect of the current mortgage…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] FamCA 554
Decision Date: 25 June 2020

CaseChat Overview and Summary

The case of *Porter and Porter & Ors (No. 2)* involved an application to set aside previous property settlement and spousal maintenance orders, as well as a binding financial agreement. The primary dispute concerned the division of assets and ongoing financial support obligations between the parties, with the court also addressing issues related to child support and the administration of various trusts and companies.

The court was required to determine whether to set aside the existing property settlement order made on 20 June 2014 and varied on 3 March 2015, pursuant to section 79A(1)(b) of the *Family Law Act 1975* (Cth). Additionally, the court had to consider setting aside a binding financial agreement made on 23 June 2014 under section 136(1) of the *Child Support (Assessment) Act*, and discharging a spousal maintenance order made on 20 June 2014 under section 83(1) of the *Family Law Act 1975*. The court also had to make new orders for property settlement under section 79 of the *Family Law Act 1975*, and address the discharge of arrears under prior orders and agreements.

Watts J ordered that the previous property settlement order, binding financial agreement, and spousal maintenance order be set aside. Arrears under prior orders and agreements were discharged. New property settlement orders were made, including provisions for the wife to pay a sum to the Trustees and discharge a mortgage on the Suburb E property, or alternatively, for the sale of the property with proceeds distributed in specified proportions. The orders also directed the transfer of interests in various trusts and companies to the wife, a division of superannuation interests, and a transfer of shares in BB 2 Pty Ltd. The wife was to receive monies from a controlled monies account and assume responsibility for certain tax liabilities. The husband was ordered to pay periodic child support during his bankruptcy and upon discharge, with specific provisions for private school fees and other child-related expenses. The husband's application to discharge the spousal maintenance order was dismissed.

Orders

Orders of the court

Pursuant to s 79A(1)(b) Family Law Act 1975 (Cth) (“the Act”), the property settlement order made on 20 June 2014 and as varied on 3 March 2015, be set aside.

Pursuant to s 136(1) Child Support (Assessment) Act, the binding financial support agreement made 23 June 2014 be set aside.

Pursuant to s 83(1) of the Act, the spousal maintenance order, being order 26 made 20 June 2014, be discharged.

All arrears under prior orders, agreements and third party debt notices are discharged to the date to which they stand paid.

Pursuant to s 79 of the Act, an order be made in accordance with paragraphs 6 to 20.

The Suburb E property

Within three (3) months, the wife pay to the Trustees the sum of $315,000 and discharge the Trustees of any liability in respect of the current mortgage to Westpac Banking Corporation on the property at WX Street, Suburb E (“the Suburb E property”).

Contemporaneously with the wife’s compliance with the preceding paragraph, the Trustees transfer to the wife all their right, title and interest in the Suburb E property and the Trustees shall withdraw any caveat the Trustees currently have lodged against the title of the Suburb E property.

In the event that the wife does not comply with paragraph 6, then the wife and the Trustees do all things and sign all necessary documents to sell the Suburb E property by either private treaty or auction as agreed between them or failing agreement, to be determined in accordance with this order, at a price set by the parties by agreement or failing agreement, to be determined in the way nominated by this order and the net proceeds of sale, after rate adjustments, be distributed as follows:

(a) Payment of the costs of sale including agent’s commission and legal fees;

(b) Discharge of the mortgage to Westpac Banking Corporation;

(d) Payment to the Trustees of 35 per cent (35%) of the balance.

In respect of the sale referred to in paragraph 8, failing agreement between the wife and the Trustees:

(a) As to the selling agent, then as appointed by the President of the Real Estate Institute of New South Wales for the time being and

(b) As to whether or not the Suburb E property will be sold by private treaty or auction, the selling agent will make that determination

(c) As to a reserve price at auction or a sale price by private treaty, then as set by a real estate valuer appointed by the President of the Australian Property Institute from time to time

10.

Ms O (and in the event she is not the sole director), the directors of CC Pty Ltd and, if necessary, the Trustees and the husband, do all things and sign all necessary documents to transfer to the wife all interest held by any of them in:

· The CC Trust which holds the units in the N Trust;

· N Pty Ltd;

· CC Pty Ltd.

Superannuation

11.

In accordance with s 90XT(1)(b) of the Act and with the intention that the wife shall take 50 per cent (50%) of the interests of the husband in the Q Superannuation Fund (the fund), including the interest held by the fund in units in the unit trust which owns MN Street, Suburb G:

(a) The wife (or the wife’s administrators, executors, beneficiaries, heirs or assigns) is entitled to be paid the specified percentage out of the husband’s interest in the fund;

(b) The husband’s entitlement (or the entitlement of such other person to whom a payment may be made out of the husband’s interest) in the fund is correspondingly reduced by force of this paragraph; and

12.

The trustee of the fund, BB Pty Ltd and Ms O as director of that trustee company, do all such acts and things and sign all such documents as may be necessary to:

(a) Calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the wife in the immediately preceding clause of this Order; and

(b) Pay the entitlement whenever the trustee makes a splittable payment from the wife's interest in the fund.

13.

The directors of the trustee of the fund, and the husband as a member of the said fund, shall do all things and sign all documents including but not limited to the signing of Trustee Minutes, serving of all relevant notices and signing all documents as may be necessary to effect the superannuation split referred to herein.

14.

Paragraphs 11 to 13 have effect from the operative time and the operative time is seven (7) days after the date of service of this order upon the trustee and bind the trustee of the fund.

The Unit Trust

15.

The shareholder(s) of BB 2 Pty Ltd transfer the wife one half of their shares in that company.

16.

Ms O (and if she is not the sole director) the current directors of BB 2 Pty Ltd, do all things and sign all necessary documents to appoint the wife or a person she nominates in writing as a director of the company and thereafter she ensure that there is only one other director of BB 2 Pty Ltd.

17.

In the event that it transpires that BB Pty Ltd does not own the units in the unit trust which owns MN Street, then BB 2 Pty Ltd shall transfer 50 per cent (50%) of those units to the wife.

The controlled monies account

18.

Ms YZ (and if she is not the sole principal), the current principals of YZ & Associates, pay to the wife the whole of the monies in the controlled monies account and the wife shall be responsible for 51 per cent (51%) of any tax liability (including capital gains tax) in respect of the dispositions of the properties at FG Street, Suburb GH and QQ Street, Suburb G and the whole of the responsibility for any capital gains tax liability in respect of the disposition of Unit 1, MN Street, Suburb G and PP Street, Suburb G.

19.

After Ms O’s compliance with all obligations under the property settlement order, any interim order restraining Ms O from dealing with any company or her interest in any company or resigning as director of any company, is discharged.

Debt in the husband’s bankrupt estate

20.

The wife shall indemnify the Trustees in respect of any debt she has proved in the husband’s bankrupt estate.

Child support

21.

All arrears of child support are discharged to the date to which payments have been made as at the date of these orders.

22.

During the husband’s bankruptcy the husband is to pay to the wife periodic child support in respect of the three children in the sum of $1,000 per week (apportioned as to $333.33 per week per child) together with 100 per cent (100%) of private school fees for the children’s schooling and preschool costs; 100 per cent (100%) of all costs of the children’s school uniforms, compulsory school equipment, stationery and text books including but not limited to laptops and iPads; 100 per cent (100%) of school excursions, camps and school related events and 100 per cent (100%) of all costs related to the children’s medical and dental treatment, including private health treatment and health insurance.

23.

Once discharged from his bankruptcy, the husband pay to the wife by way of periodic child support in respect of the three children, the sum of $2,100 per week (apportioned as to $700 per week per child) together with 100 per cent (100%) of private school fees for the children’s schooling and preschool costs; 100 per cent (100%) of all costs of the children’s school uniforms, compulsory school equipment, stationery and text books including but not limited to laptops and iPads; 100 per cent of school excursions, camps and school related events and 100 per cent (100%) of all costs related to the children’s medical and dental treatment, including private health treatment and health insurance.

Spousal maintenance

24.

All arrears of spousal maintenance are discharged to the date to which payments have been made as at the date of these orders.

25.

The husband’s application for the discharge of the current 2014 spousal maintenance order is dismissed

26.

All other applications are dismissed.

27.

If either party refuses or neglects to sign (within fourteen (14) days of a written request to do so) any documents necessary to effect the terms of these Orders, the Registrar of the Sydney Registry of the Family Court of Australia is hereby appointed pursuant to the provisions of s 106A Family Law Act to execute such documents on behalf of such party.

Note: The form of the order is subject to the entry of the order in the Court’s records.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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